MUMBAI: In a first step to take the highly successful UPI to the wider world outside, the Reserve Bank Monday entered into an agreement with the Asean countries to create a platform to facilitate instantaneous cross-border retail payments.
The Reserve Bank has been collaborating bilaterally with various countries to link the fast payments system (FPS) - the unified payments interface (UPI) - with their respective FPSs for cross-border person to person (P2P) and person to merchant (P2M) payments. And the UPI is already active in Singapore and the UAE and a few North African countries.
To achieve the objective, the Reserve Bank has now joined the Project Nexus, a multilateral international initiative to enable instant cross-border retail payments by interlinking domestic FPSs.
Project Nexus, conceptualised by the Innovation Hub of the Bank for International Settlements (BIS), aims to connect the FPSs of four Asean countries (Malaysia, the Philippines, Singapore, and Thailand) and India making them the founding members and first mover countries of this platform.
An agreement to this effect was signed by the BIS and the central banks of these founding countries - Bank Negara Malaysia, Bank of Thailand, Bangko Sentral ng Pilipinas, the Monetary Authority of Singapore, and Reserve Bank of India on June 30, in Basel, Switzerland, the RBI said in a statement.
The platform, which can be extended to more countries, is expected to go live by 2026. Once functional, Nexus will play an important role in making retail cross-border payments efficient, faster, and more cost-effective.
Indonesia, which has been involved from the early stages, continues to be involved as a special observer.
While India and her partner countries can continue to benefit through such bilateral connectivity of FPSs, a multilateral approach will provide further impetus to our efforts in expanding the international reach of Indian payment systems, the RBI said.